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Ideas, Information, Inspiration (June/July 2010)


Travel Incentives Boost Performance, Retention

Results from a recently conducted analysis of one company’s long-standing use of travel awards as a motivational tool show that such incentives have a clear, measurable and positive impact on employee performance and retention. The Incentive Research Foundation and the Rosen College of Hospitality Management at the University of Central Florida conducted the study to document the “anatomy” of an incentive travel program (ITP) and provide a better understanding of the broad reach of a successful ITP. One key measurement of program success was its relationship to retention and performance. Examining the tenure and performance ratings of 105 employees who earned the incentive trip at the company, researchers found that the largest group had a performance rating of 1 (1 being the highest level of performance and 4 the lowest level of performance) and tenure of 4 years or more, while the second largest group had a performance rating of 2 and tenure of 4 years or more. Together, these two groups accounted for 55% of incentive travel earners, showing a very real correlation between incentives, longevity and quality – in other words, ITP participants tend to perform better and stay with the company longer than other employees. Overall, 88.5% of incentive travel earners had a performance level of 1 or 2 compared to 31.2% of the population of active critical employees with those same performance ratings.

For a copy of the white paper, Anatomy of a Reward: The Broad Impact of Incentive Travel Programs, go to: www.TheIrf.org

Case Study

Engagement Links Directly to Higher Sales

An in-depth review of a 2009 annual meeting of a major healthcare provider reveals that a comprehensive engagement strategy can help increase sales and boost profits. Researchers from the ROI of Engagement Group and the Enterprise Engagement Alliance recently measured the return on investment (ROI) from a gathering of brokers and management personnel that featured a program of training, relationship building and networking opportunities designed to increase sales and profits in specific markets and engage channel partners. The report, The ‘ROI in Channel Partner’ Conferences – A Case Study, found that the engagement program translated into brokers presenting and quoting the company’s products more frequently, which in turn resulted in significantly stronger reported sales from event participants. Specifically, 94% presented the firm’s products more often; 98% quoted them repeatedly; and 90% reported greater sales of these products. This is the third major research study released by the Enterprise Engagement Alliance examining the effectiveness of corporate engagement strategies. The company in question (referred to in the report as “Allsante, Inc.” at the company’s request, due to competitive reasons) wanted to measure the effectiveness of the “Allsante, Inc. Encounter” conference and come up with hard data against which to make decisions about improving future programs. Initial results reveal that the program had a profound impact on the way brokers thought and felt about Allsante, its products and its people.

A copy of the study, The ‘ROI in Channel Partner’ Conferences – A Case Study, can be downloaded at: www.enterpriseengagement.org

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Rewards & Recognition

Research Identifies Key Drivers of Reward

Global management consulting firm Hay Group has released a study called The Changing Face of Reward that examines the drivers in reward and remuneration that now dominate the thinking at most companies. Three clear messages emerge from the findings:

  1. Companies are looking for ways to balance the need to reward employees responsibly with increasing scrutiny from government regulators
  2. Recruiting and retaining key talent continues to be an important strategy, with the focus on motivating, engaging and rewarding critical high performers
  3. The use of bonuses is increasing; incentives are a critical lever for motivating performance and employee engagement.

“Reward strategy is now driven in the Boardroom as executives recognize that the war for talent knows no boundaries,” says Nick Boulter, Global Managing Director of Reward Services at Hay Group, “so strategies for retention, motivation, engagement and performance improvement are integral to competitiveness.” The war for talent has narrowed to three fronts, the study finds: around high performers, high potentials and “mission-critical” roles. Companies are now channeling what limited rewards there are to these key groups, often drawn from Generation Y, for whom money in itself is not the only motivating factor. As a result these differentiated reward programs are now geared toward offering clear career paths, global mobility and targeted development in addition to higher monetary awards.

To read more, go to: www.haygroup.com/Downloads/ww/misc/CFR_global_report.pdf

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Partnership Generates Engagement Synergy

A new alliance between the public sector and private sector will facilitate the flow of research on the emerging field of Enterprise Engagement between businesses and government agencies, increasing their economic efficiency and operational effectiveness. The partnership between TMGov.org, a portal serving the government sector, and the Enterprise Engagement Alliance will provide research and education via online and print – TMGov.org’s digital magazine, Leadership Excellence in Government  and EEA’s quarterly print publication, Engagement Strategies Magazine – as well as through other media and events. “Engaging all of our key constituencies, whether in the government or private sector, will be critical to our ability to improve performance and compete in the coming years,” says Allan Schweyer, Principal of the Center for Human Capital Innovation and Chairman of the Enterprise Engagement Alliance. “The government has a lot to learn from the private sector about how to become customer-focused and maximize talent, while at the same time working within the framework of public service. We are hoping we can help further this effort by exchanging information across all sectors of the economy.”

For more information, go to: http://tmgov.org or www.enterpriseengagement.org

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Fina Shares ‘Perspectives’ in New Book

“The path to being an effective manager and leader begins with a handful of essential traits,” says Michael A. Fina. “It’s the ability to build and maintain relationships, the capacity to recognize problems and take the necessary action to solve them, the conviction to trust your instinct, the wisdom to keep an open mind and, above all else, to act with integrity. These traits, combined with a well-developed employee celebration strategy that is aligned with business goals, can improve performance, productivity and profitability.”

Fina, Vice President of Michael C. Fina, discusses the philosophies that have led to the continued success of his family business in a new book, Perspectives on Managing Employees. The book includes Fina’s own ideas on engaging new hires early in their employment, building trusted relationships between managers and employees, strategic employee celebrations and how successful managers navigate through HR minefields. He also highlights the importance of employee retention in both good economic times and bad. According to Fina, a well-developed and executed retention plan is key to reducing these costs, maintaining productivity and staying competitive in your market. Most importantly, this plan doesn’t have to feature the hefty cash bonuses or lavish trips on the company dime that have been the subject of media and public scrutiny of late.

Perspectives on Managing Employees by Michael A. Fina; Published by Course Technology PTR, 2009.

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Employee Engagement Critical to Business Success

A survey conducted by Mercer with over 160 members of the Chartered Institute of Personnel and Development (CIPD) found that 78% believe employee engagement is important or extremely important to their organization in the current economic and business climate. However, only 45% of respondents report that their organization is actually attempting to measure it. The most common forms of measurement are surveys (85%), focus groups (42%) and management interviews (25%). Researchers say businesses that don’t research employee engagement often make the wrong choices concerning benefits and HR policy, and that it’s essential that leaders take employee engagement seriously.

Download key findings at: www.mercer.com/summary.htm?idContent=1375790

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Amazon Raised the Bar, Even If Its Stay Was Short

Word began to spread in early April among Amazon.com incentive industry partners and others in the industry. It seems that after a short, two-and-a-half-year foray into the incentive marketplace, the online retail giant is pulling out. The move came as a surprise to most, though a few industry insiders say they saw the warning signs of a pullout over the last few months. As of press time, Amazon had released no official statement.

“They gave us a call and said they were terminating our contract and they were leaving the incentive industry,” says Jeff Dalton, President of Paramax, one of the firms that provided an integration platform to connect smaller incentive companies to Amazon’s fulfillment services. “That’s it, really. They were very businesslike. But they’re being flexible. They’re not cutting us off tomorrow. Everyone was caught by surprise, industrywide.”

Beau Ballin of MotivAction, one of the first incentive companies to integrate with Amazon to offer its merchandise as part of its reward catalog, says his company wasn’t caught completely off guard by the impending move. “This isn’t really a surprise or a shock to us,” he notes. “Amazon has been making changes to contracts and to the way they handled these types of programs for almost a year now.” As a result, Ballin says, MotivAction shifted the way it worked with Amazon and how it was incorporated into reward programs to the point where this decision hasn’t really had a huge impact.

There is quite a lot of speculation about why Amazon is pulling out of the market. David Peer, VP of client Services at Hinda Incentives, suggests that the sales tax issue loomed large. “Historically, Amazon has avoided collecting sales tax in states by contending it didn’t have nexus – a physical presence – in certain states,” Peer says. “But with its affiliate network in the incentive industry, it was being argued that they did have a presence. And that was something it didn’t want to be mired in.”

Whatever the reason for its departure, there’s no doubt that Amazon.com’s short stay in the incentive market has raised the bar for those who remain. Jeff Dalton notes that “We really did the right thing when we integrated with Amazon. Even if they’ve pulled out, it brought us to a whole new level of catalogs. When we built the Awards Marketplace and the Amazon integration, we had to build something that was a whole lot more robust than the typical incentive catalog with a thousand or so products in it.”

Mike Ruege, Executive VP of U.S. Motivation, agrees: “Amazon has forced us all to be a little better about how we run our business and to make the experience for the customer a far better one by giving them the same choice and empowerment they have in the consumer marketplace.”

Mike Hadlow, CEO of Engagement Technology LLC, agrees that Amazon’s presence in the marketplace has raised the bar for other incentive companies, “particularly related to product availability, range of products, customer service and increased availability of products in lower price ranges.”

And while Amazon’s shoes will be tough to fill, at least in the near term, Engagement Technology, whose Universal Rewards Exchange platform is designed to connect clients with dozens of suppliers and tens of thousands of products via an automated interface, expects to be able to come close. The firm has also established relationships with a number of distributors of DVDs and other media products to be able to improve its offerings in the under-$50 price range.

Hadlow notes that the Universal Rewards Exchange also lets customers take advantage of greater customization opportunities – custom packaging and messaging to increase the trophy value of awards – and make greater use of their incentive programs to build engagement and establish closer relationships with employees, channel partners and customers. “With Amazon – and the requirement that Amazon packaging and inserts be used – companies lost some of their ability to take advantage of those opportunities,” he says.

Incentive magazine reports that Amazon Gift Cards – technically a separate division – released a statement regarding it’s commitment to the incentive market that reads, in part: “We will continue to deliver Amazon Gift Cards to the corporate incentive market. We look forward to providing the incentives market a highly desirable gift card with a large selection of low-priced merchandise, backed by the customer experience, trust and brand recognition of Amazon.com.”

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June/July 2010

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